- SAP reported customer numbers on HANA — right up until 2015.
- The question we cover is what happened to this reporting and what it means.
SAP has two ways of speaking in general. One is when they are speaking to an audience that is compliant, like at SAPPHIRE and on analyst calls. On analyst calls SAP makes confident statements about the growth of its products, but the evidence is normally lacking. In this article, we will address the peculiar decline in reporting on HANA implementation numbers.
The Diginomica Article
In Q2 of 2015, one of the last definitive statements around customer numbers was issued. Diginomica is paid by SAP, so they are a compliant media outlet for them. Every single time we evaluate the accuracy level of an entity that is funded by SAP, we find high levels of inaccuracy. And this has been true of every Diginomica article we have reviewed.
The revenue growth from HANA is described as explosive by John Appleby.
“…the explosive revenue growth from HANA continues, even if average deal volume has decreased, because there are plenty of sell-ons to existing customers. Therefore your original projections are probably about right. This means that HANA is supporting core revenue quite significantly by now. But also, every deal is a HANA deal, and deals are bundled.” – John Appleby
John Appleby was a primary shill for SAP in the past but has since fallen out of favor with SAP and no longer writes on HANA. But at this time in 2015, he was a primary source of information on HANA.
After Appleby, one of other least accurate sources of information on SAP, is Ron Enslin, and he had the following to say.
“This quarter, the number of HANA customers surpassed 7,200 compared with 3,600 a year ago.”
So there is the definitive quote. 7,200 customers in the 2nd quarter of 2015.
Dennis Howlett, the article’s author stated the following:
“This is a crucially important point because now, SAP is recognizing the need to be aligned to ‘solving the unsolvable’ and ‘imagining the unimaginable’ problems that former board member Vishal Sikka, now CEO Infosys envisioned back in 2010-12 and which he is carrying through in his current company.”
This is an amazing quotation, because it is a writer repeating another highly unreliable source, Vishal Sikka, without even filtering the observation. Furthermore, even in 2015, it was known that Vishal left SAP under unusual circumstances.
Where Are the 2016, 2017 or 2018 HANA Customers?
We searched online for HANA customers in 2016, 2017 and 2018 and could not find any statements from SAP on HANA customer numbers. If the growth was explosive in 2015 — why did the reporting of customer numbers stop in 2015? Interestingly, SAP appeared to change the narrative to S/4HANA, and began quoting S/4HANA customers numbers rather than HANA customers.
The Customer Estimate from iDatalabs
We found that iDatalabs tracks the number of HANA customers. iDatalabs is a sales intelligence firm, so they profile the usage of applications and databases in order to sell the data to companies that want to sell into customers that have ABC or XYZ product already.
We have reviewed iDatalabs in the past and found their estimates to seem reasonable, and they do not have an incentive to overestimate or underestimate the number of customers.
“We have found 7,370 companies that use SAP HANA. The companies using SAP HANA are most often found in United States and in the Computer Software industry. SAP HANA is most often used by companies with 50-200 employees and 1M-10M dollars in revenue. Our data for SAP HANA usage goes back as far as 3 years and 9 months.”
If this is accurate it means that SAP has not grown its HANA customers since it last reported the HANA numbers in 2015. For another data point, we went out to DB Engines, which tracks database popularity.
Notice that HANA begins to stall in 2015. Up until that point, SAP had a growth story, but growth was much more difficult to come by after this. Would this explain why SAP simply stopped reporting customer numbers?
Customer Numbers Versus Number of Instances
A customer that brings buys a single instance of HANA is a customer of HANA. But one customer can have any number of individual HANA database instances. Therefore, the overall popularity would be measured by the total number of instances rather than the number of customers. Oracle, as an example, will normally have customers that use many instances of their Oracle database.
Top Customers of HANA
iDatalabs lists the following top customers for HANA.
“Royal Dutch Shell PLC shell.com Netherlands >1000M >10000
ICS Consultancy Services icsconsultancy.com India 10M-50M 50-200
Mawai Infotech Limited mawai.com India 10M-50M 50-200
Birlasoft (India) Ltd. birlasoft.com India 200M-1000M 1000-5000
SuccessFactors, Inc. successfactors.com United States 200M-1000M 1000-5000”
Notice that three of these companies are SAP consulting firms, and a fourth (SuccessFactors) is actually an SAP company.
Faux Customers Through SAP Consulting Firms
Something that is not generally explained is that the vast SAP ecosystem adopt SAP products, not to use them internally, but to build skills. Therefore they bring up a demo environment to show customers, and they are counted as a customer of that product. We found this repeatedly in the S/4HANA space, where again, many customers of S/4HANA were SAP consulting firms. This means that a sizable component of the early growth of HANA “customers” was to the consulting ecosystem. It should go without saying that these are not real customers. And when SAP has so many SAP consulting firms that it can transfer licenses to at very low cost, this is a primary way that SAP rigs the growth numbers of new products to make them look more successful than they actually are. By the time the growth slows down (as has now happened with S/4HANA) SAP simply pivots the reporting to a new product, which again is early in its lifecycle and being adopted by the SAP consulting firms.
SAP has grand plans for HANA, and when they did not pan out, SAP stopped reporting HANA customer numbers. This is consistent that when the numbers are good, the numbers get reported, and when they are not, they don’t get reported, and the company moves to reporting on other things. Growth is easy to attain in the beginning, but as a product gets better known, if it is less effective than advertised, its growth slows. And HANA was far less effective than advertized. We began our own coverage on HANA’s inaccuracies around 2016 as evidence began to come in that all was not right on HANA implementations.
Getting to the Detail of TCO
The Mechanics of TCO
- Understand why you need to look at TCO and not just ROI when making your purchasing decision.
- Discover how an application, which at first glance may seem inexpensive when compared to its competition, could end up being more costly in the long run.
- Gain an in-depth understanding of the cost, categories to include in an accurate and complete TCO analysis.
- Learn why ERP systems are not a significant investment, based on their TCO.
- Find out how to recognize and avoid superficial, incomplete or incorrect TCO analyses that could negatively impact your software purchase decision.
- Appreciate the importance and cost-effectiveness of a TCO audit.
- Learn how SCM Focus can provide you with unbiased and well-researched TCO analyses to assist you in your software selection.
- Chapter 1: Introduction
- Chapter 2: The Basics of TCO
- Chapter 3: The State of Enterprise TCO
- Chapter 4: ERP: The Multi-Billion Dollar TCO Analysis Failure
- Chapter 5: The TCO Method Used by Software Decisions
- Chapter 6: Using TCO for Better Decision Making